- 52 -
U.S. 733, 739-740 (1949). The incidents of taxation cannot be
avoided through an anticipatory assignment of income. See United
States v. Basye, 410 U.S. 441, 447, 449-450 (1973); Lucas v.
Earl, 281 U.S. 111, 114, 115 (1930). This has been described as
"the first principle of taxation". Commissioner v. Culbertson,
supra at 739. The question of who should be taxed depends on
which person or entity in fact controls the earning of the income
rather than who ultimately receives the income. See Commissioner
v. Sunnen, 333 U.S. 591, 604-606 (1948); Corliss v. Bowers, 281
U.S. 376, 378 (1930); Vercio v. Commissioner, 73 T.C. 1246, 1253
(1980); see also Ronan State Bank v. Commissioner, 62 T.C. 27, 35
(1974); American Sav. Bank v. Commissioner, 56 T.C. 828 (1971);
Nat Harrison Associates, Inc. v. Commissioner, 42 T.C. 601
(1964). A taxpayer realizes income if he controls the
disposition of that which he could have received himself but
diverts to another as a means of procuring the satisfaction of
his goals. The receipt of income by the other party under such
circumstances is merely the fruition of the taxpayer's economic
gain. See Commissioner v. Sunnen, supra at 605-606; Helvering v.
Horst, 311 U.S. 112, 116-117 (1940).
Respondent does not, and need not, challenge OPL's separate
existence as a valid corporate entity. The classic assignment of
income cases involve persons and entities whose separate
existence was unquestioned. See United States v. Basye, supra;
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